The owners of Danedream may not be able to look forward to stallion fees after their filly led home a 1-2-3 for female runners in the Prix de l'Arc de Triomphe on Sunday but selling the film rights could be a decent alternative. Bought for €9,000 at an auction in Baden Baden last year, Danedream was a 27-1 outsider in a field that was packed with high-class form but the favourites had no answer to her finishing kick as she sped clear in the straight to win by five lengths.

Danedream's first race was at Wissembourg in Alsace, a track thatcould fairly be described as obscure, even by a resident of Wissembourg. Yet only three horses, two of them the all-time champions Ribot and Sea-Bird, have won an Arc by more than five lengths, and no horse has completed its mile-and-a-half trip faster than Danedream. The groundat Longchamp was riding fast but it was still quite an achievement to shave a tenth of a second from Peintre Celebre's record time, set in 1997, and do so with such ease that Andrasch Starke, her jockey, was able to enjoy the moment in the final 100 yards.

Shareta, a rank outsider, and the Ed Dunlop-trained Snow Fairy completed the frame for fillies, with the muscular five-year-old So You Think in fourth, the first male horse across the line. Workforce, last year's winner, never threatened before fading to finish 12th, while Masked Marvel, the St Leger winner, finished last of the 16 starters.

If Danedream's price tag as a two-year-old was unfashionable for an Arc winner, then so too was her place of origin. In 89 previous runnings of the Arc there had been only one German-trained winner, the rank outsider Star Appeal ridden by Greville Starkey in 1975, but it was clear that their record was about to improve by 100% as soon as Starke angled out for a run a furlong from home with Danedream still cantering underneath him.

"This is the win of a lifetime," Starke, the first German jockey to win an Arc, said. "It's like a dream. She made a fabulous burst when I asked her to give it her all. The acceleration was worthy of a very, very great filly."

Peter Schiergen, Danedream's trainer, was a champion as a jockey in Germany before turning his attention to preparation in 1998. He saddled Boreal to win the Coronation Cup at Epsom in 2002 but Sunday's win, which earned a first prize of nearly £2m, was by far the most important of his career. "She is a small filly but she has a big, big heart and there's no better race to win than this," Schiergen said. "I have trained some Group winners but she is the greatest filly I have ever trained. She won her last two races very easily but I didn't think she would be such an easy winner today. This is a really big day for German racing."

There is no reason to think that Danedream's rapid improvement has finished yet and she is likely to remain in training next year.

"My father has had horses for 35 years but we have never had anything like this," Heiko Volz, whose family recently sold a half-share in Danedream to the Japanese breeder Teruya Yoshida, said.

"We bought her at the breeze-up sale in Germany for €9,000 and we just thought she would be a fun horse who could maybe win a race. She had her first run at Wissembourg because we thought it would be an easy race to win. She has just improved and improved and now we're here."

It remains unclear whether Danedream will have another race as a three-year-old, although the Breeders' Cup meeting at Louisville in Kentucky early next month offers two possible targets in either the Turf, on the main Saturday card, or the Filly & Mare Turf 24 hours earlier.

"She has run seven times already this year, so I don't think she needs to run again," Volz said. "But it's the trainer who decides."

British stables enjoyed a lucrative afternoon on the Arc's undercard, with four wins in the six supporting Group One events. John Gosden's Elusive Kate, who runs in the colours of his Breeders' Cup Classic winner Raven's Pass, is an 8-1 chance for next year's 1,000 Guineas after a comfortable success in the Prix Marcel Boussac, while Roger Varian, whose mentor Michael Jarvis died 13 days ago, took the first Group One of his career when Nahrain got home by a nose under Frankie Dettori in the Prix de l'Opera.

Goldikova's final start in France in the Prix de la Forêt ended in defeat as Dream Ahead – who now retires to stud – took his third Group One of the year for David Simcock but she remains favourite to record an unprecedented fourth straight win in the Breeders' Cup Mile next month.